Strong topline growth but bottom line affected due to seasonality and one-off expenses | Route Mobile Q4 FY22 Result Analysis

• Revenue from operations of ₹626.1 Cr compared to ₹562.8 Cr in Q3 FY22 and ₹362.4 Cr in Q4 FY21. Y-o-Y growth of 72.7% and sequential growth of 11.2% in revenue.
• Recorded Gross Profit of ₹131.8 Cr in Q4 FY22 compared to ₹118.5 Cr in Q3 FY22 and ₹79.6 Cr in Q4 FY21. Y-o-Y growth of 65.7% and sequential growth of 11.2% in Gross Profit. Gross Profit margin of 21.1%, 21.1%, and 22.0% in Q4 FY21-22, Q3 FY21-22 and Q4 FY20-21 respectively.
• EBITDA of ₹69.7 Cr in Q4 FY22 compared to ₹77.2 Cr in Q3 FY22 and ₹51.5 Cr in Q4 FY20-21. Y-o-Y growth of 35.3% and sequential de-growth of 9.7% in EBITDA. EBITDA margin of 11.1%, 13.7% and 14.2% in Q4 FY21-22, Q3 FY21-22 and Q4 FY20-21 respectively. Margins declined due to seasonality impact and one-off expenses.
• Recorded Profit After Tax of ₹47.4 Cr in Q4 FY21-22 compared to ₹46.3 Cr in Q3 FY21-22 and ₹35.5 Cr in Q4 FY20-21. Y-o-Y growth of 33.6% and sequential growth of 2.4% in Profit After Tax.
• FY22: Revenue from operations 2,002 Cr, 42% YoY. EBITDA of 257.6 Cr, 47% YoY and EBITDA Margin (12.9% in FY22). 
• Organic growth in FY22 is 33%.
• Acquired 100% stake in M R Messaging FZE (“MRM”) for an equity value of EUR 38 mn (₹ 319.2 Cr), subject to revision based on the EBITDA achieved by MRM for FYE March 31, 2023, FYE March 31, 2024 and FYE March 31, 2025. MRM’s acquisition will expand Route Mobile’s reach into new geographies primarily Europe, South Africa and Japan.
• Top client contributed 13% of the revenues while top 5 contributed 42% in FY22.
• 34% Net revenue retention in FY22.
• Recurring Revenue as % of Operating Revenue is 88% as compared to 91% in FY21.
• Attrition increased from 11% in FY21 to 21% in FY22.
• Recently signed Business Transfer Agreement with Teledgers to acquire DLT, trusted blockchain and AI powered solutions. The closure of this transaction is subject to completion of condition precedents including the outcome of an ongoing arbitration proceeding.
• FY23 guidance: 40% YoY, organic to remain around 33%. EBITDA margin to expand by 150 bps. Amortisation impact of 58 Cr and interest cost around 14 Cr in FY23.
• Company is focussed on the Spanish speaking countries of LATAM and not in the Portuguese speaking areas currently. Less competition in the Spanish areas.
• Company is looking to add more capabilities in the areas of digital fraud, identity, voice and hence, will look after acquisitions in the same areas going forward.

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